Book Stores in Australia - Literature review Example

BOOK STORES IN AUSTRALIA: MARKET ANALYSIS Name Institution Course Tutor Date Executive Summary Innovation is causing the multiples phases of world’s industries. Just as all other industries in Australia, the retail book industry has experienced different stages of evolution following the changes in the technology and other factors that are influencing the market. The innovative technology has resulted in a digital era where most materials are obtained or accessed through online sources. The global expansion and ecommerce are some of the primary drivers that have impacted the industry into a new phase. However, the bookselling industry is currently depicting a declining growth. Political, legal, economic, social, and consumer behaviours constitute some of the major factors that affect bookstore industry in Australia. Negotiating fair prices with the right holders and publishers as well as employing multichannel marketing strategies are some of the ways of meeting the consumer buying behaviours specifications. Contents Executive Summary 2 Introduction 4 Industry Overview 4 Analysis 5 Industry structure 5 Industry stage 5 The macro-environment of the industry 6 Conclusion 8 Recommendation 8 Reference List 9 Book Stores in Australia: Market Analysis Introduction Innovation is causing the multiples phases of world’s industries. Just as all other industries in Australia, the retail book industry has experienced different stages of evolution following the changes in the technology and other factors that are influencing the market. The innovative technology has resulted in a digital era where most materials are obtained or accessed through online sources. The traditional notion of what describes a book has changed for the past few years. The physical object containing pages of writing and has two covers does not solely describe what a book would imply. However, the retail book industry has advanced and the way contented is created, distributed, sold, accessed, and consumed. The contemporary market characterise digital ways of producing book products and making them available for the consumer. The global expansion and ecommerce are some of the primary drivers that have impacted the industry into a new phase. This report explores the retail book industry in Australia, analyses the market and provides recommendation for the effective ways of maximising the return from the direct sales of books in Australia. Industry Overview Over the past few years, the book stores industry has experienced various instance of change. Challenges such as the falling sales volume, pricing pressures, which are mainly claiming for reduced prices, increased impacts of stiff competition, and the change in consumers’ behaviour, have resulted in restructuring of strategies, which leaves some stores closed. According to the IBISWorld Industry Report OD5496 Industry Report (2016) report, the above challenges have reduced the increasing revenue expectations as the expectation features a decrease by 10% over the past five year through 2017. Different factors have impacted a decrease in the industry profitability as the product margin continues to decline. The real household discretionary income, consumer sentiments, the IT and telecommunications adoption rates, and the trending activities and practices in the internet and catalogue shopping, have adversely affected the book stores industry’s performance. Considering the adverse impacts of the changing nature of the industry, the revenue is projected to fall by 5.5% this year to $1.5 billion (IBISWorld Industry Report OD5496 2016). It is evident that, without a corrective strategy, the book stores industry can continue recording declines in its key determinants. Analysis Industry structure Australian bookshop or bookselling industry is depicts a monopolistic competition structure. The industry features many booksellers since there is intense completion with no barrier to the market entry. Due to the many sellers in the industry, product range, customer service, marketing strategies, and delivery methods are some of the determinants of the different offers in the industry. Pricing is individual-based and is mainly determined by the services offered. The market segments that this industry targets include young adults, high incomes, married people without children, college graduates, school-going persons, and married people with older children who can use print books. Industry stage The bookselling industry in Australia characterises different stages of growth. It features the traditional brick-and-mortar stores in the declining stage and online bookselling in the maturity phase (IBISWorld Industry Report X0004 2016; IBISWorld Industry Report G4244, 2016). Similarly, Wehner (2016) argues that the bookstore industry in Australia is depicting elements of the declining phase in the growth stages such as decrease in sales, declining revenue, reducing number of customers and firms. The macro-environment of the industry Even though the industry features perceived hostile impacts to book retailing activities, the independent bookstores are still managing to strategies and secure a place in the market. The common perspectives that explain the survival of the bookstores in the market include strategizing on their position, pricing technics and levels, and other coherent factors. According to Isoraite (2009), the above factors are some of the determinants of the theoretical marketing strategies in a retail environment. Concerning position of the product in the market, the theoretical marketing aspect in the retail industry requires that an enterprise should be able to palce its product in the market in such it creates its own demand (Isoraite 2009; Marjanova et al. n.d.). According to Marjanova and the colleagues, strategic positioning in the market is what determines the demand and consequently the price of the product. However, there are various macro-environment factors that have majorly impacted the bookstore industry marketing. Macro-environment has contributed to the declining trend of the bookstore industry, particularly in Australia. One of the elements of this environment includes political and legal factors. The Australian bookstores have experienced two major areas of influence from the political and legal factors. According to Wehner (2016), the government is currently not imposing Goods and Services Tax (GST) on the overseas consumer purchases. The author argues that this factor has resulted in stiff competition against the local bookstores since the oversea seller charge 10% less. Therefore, it is relatively challenging for the retail bookshops in Australia to maximise or even maintain their market share as consumers shift towards the low priced books from the oversea sellers. Another aspect of political and legal influence of the macro-environment is parallel importation. Under the Australian Copyright Act, the local sellers are only expected to purchase books in bulk from the right holders (Wehner 2016). This aspect provides the outside seller, who can sell cheap books from different available sources, to acquire the cheap copies from different permitted suppliers, hence impacting their price positioning. Another marking determinant in this industry is the social and economic states of the region. Factors such as unstable local and global economies, reduced consumer confidence, due to other alternative source of the products mainly from online suppliers, and the subdued discretional spending, are some of the economic contribution towards the unfavourable market in the bookstore industry. Mattson (2003) argues that marketing in retail sector and the success of a retail business is majorly affected by the economic factors that determine the changes in consumer perception and behaviours. According to the factor analyses of doing business in Australia, the cost of starting and operating a business in the country is significantly increasing (The World Bank 2016). Inferentially, the current local and global economic climate favour others that the retail industry. Similarly, the social aspect of the determinants of bookstore industry market depicts a change in the consumer buying behaviours. Wehner (2016) argues that the digital era has influenced consumers towards the online electronic books. Consumers are purchasing and using e-books that the print books that are the primary products of the bookstores. This has resulted in a decline in sales volume, revenue returns, and the ability of the business to compete effectively, since the global markets are trending on the e-books that the print products. The social aspect of market determinants can be linked to the technological effects. Technology is advancing and books are cheaply and readily available online. This phenomenon has changed the preference of the consumers to shift towards the online shops selling e-books that the retailers who sell print books. Conclusion The bookstore industry is currently in the declining phase of growth owing to various macro-environment factors. Consumers are shifting towards the online e-books and the oversea suppliers. Technology, economic and political and legal factors are some of the drivers to the changes in the market. Recommendation The success in the declining industry requires strategic positioning in the market (Isoraite 2009; Marjanova et al. n.d.). Therefore, it is imperative that bookstores consider investing strategically on marketing activities and universal brands. This aspect would enhance the consumer experience with their services and products. The local bookstores also need to maximise their efforts and ensure that they each in good terms with the publisher and the right holder to allow for price changes that would attract the consumers as it does for the overseas sellers. Additionally, it is essential that the booksellers employ the multichannel retailing mechanism. Gajanan & Basuroy (2007) explains that using different channels of marketing such as physical and online methods increases the ability to reach more consumers nationally. Besides, the young adult and college students segments are majorly accessible through online channels. Further, customer services, loyalty, delivery speed and reliability, and seasonal inventories that observe the characteristics of the various segments; such as college graduates, married with school-aged or older children, married without children, and young adults; are some of the factors that bookstores should consider. Reference List Gajanan, S. & Basuroy, S, 2007. Multichannel retailing and its implications on consumer shopping behaviour. Journal of Shopping Centre Research, Vol. 14, No. 2, 1-28. IBISWorld Industry Report OD5496, 2016. Book Stores in Australia: Marketing Research Report. Available from https://www.ibisworld.com.au/industry-trends/specialised-market-research-reports/consumer-goods-services/book-stores.html IBISWorld Industry Report X0004, 2016. Online shopping in Australia IBISWorld Industry Report G4244, 2016. Newspaper and book retailing in Australia Isoraite, M, 2009. Theoretical aspect of marketing strategy. Economic and Management: Current Issues and Perspectives, Vol. 1, No. 14, 114-125. Mattsson, L, 2003. Understanding market dynamics-potential contributions to market(ing) studies from actor-network theory. IMP Group Conference, Lugano, 2003. The World Bank, 2016. Starting a business in Australia. Available from http://www.doingbusiness.org/data/exploreeconomies/australia/starting-a-business Wehner, C, 2016. An industry analysis of the Australian print bookselling industry. Available https://bluetrainenterprises.com.au/blog/2016/11/18/industry-analysis-australian-print-bookselling/ Read More